Looking at Fidelity Select Consumer
Staples Portfolio (FDFAX)
For the past few weeks, we’ve been taking a look at a few of our favorite recommendations for mutual funds. If you’re thinking of investing in a mutual fund, you’ll find a lot of excellent funds that have made our list. Today, we’re looking at the Fidelity Select Consumer Staples Portfolio, also known as FDFAX. Why should you consider this fund? Here are a few good reasons.
The Focus of FDFAX
The focus of this fund is to seek capital appreciation. Their strategy is to invest their assets in about 80 percent of companies that hold their securities in manufacture, distribution, or sale of certain staples to consumers. These companies are both held in the United States and abroad. FDFAX seeks common stocks and is a non-diversified fund. This means the companies that make up this fund are most likely companies you’ve heard of.
Who are some of the companies that are the top holdings of FDFAX? Here are a few we’ve found. Coca Cola is the largest holding, with their stocks making up about 65.6 percent of the entire fund. Walmart is also on this list, as well as Procter & Gamble. Monster Beverage Company makes the list as well, along with Philip Morris International and the Boston Beer Company.
In fact, this fund is mostly made up of beverage companies, to the tune of $1.5 billion in assets. Its category is labeled as “Consumer Goods,” and so too is its portfolio style.
Investing in FDFAX
As mutual funds go, FDFAX is an excellent choice. Not only are its top holdings companies you’ve heard of, they’re solid companies that aren’t going anywhere. Considering this fund is offered through Fidelity, you can rest easy that your investment is in good hands.
This particular fund began on July 29th, 1985, so it’s been around for quite awhile, nearly 40 years. And good news, FDFAX is open to investors! Minimum investment in this fund is $2500, however if you’re looking at FDFAX for your IRA, you’ll only need a minimum of $1000.
That said, there is some risk involved with FDFAX. This fund is mainly made up of consumer companies, and as the economy goes, so too can this fund fluctuate. Considering they hold both domestic and international holdings, this fund could be susceptible to political developments, food pricing, food fads, or competitive pricing, just to name a few issues. Make sure you go into this fund with your eyes wide open.
At the End of the Day
At the end of the day, FDFAX is, overall, a great choice when it comes to deciding the mutual fund you’ll want to invest in. Even with the risk involved, it is minimal when considered against the staying power of the fund’s top holdings. If you’re ready to invest, don’t be afraid to dip your toe into this fund!
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